5 years ago

Bentley’s latest proposal would raise Alabamians’ taxes by at least $260 million annually

Gov. Robert Bentley delivers the 2015 State of the State Address, Tuesday, March 3, 2015, in the Old House Chamber of the Alabama State Capitol in Montgomery. (Photo: Governor's Office, Jamie Martin)
Gov. Robert Bentley delivers the 2015 State of the State Address, Tuesday, March 3, 2015, in the Old House Chamber of the Alabama State Capitol in Montgomery. (Photo: Governor’s Office, Jamie Martin)

MONTGOMERY, Ala. — The Bentley Administration says the governor’s latest proposals will increase Alabamians’ taxes by $260 million annually.

Gov. Bentley on Thursday released details of his proposals for next week’s special session of the Alabama Legislature. In addition to several reform measures meant to address structural budgeting issues, the governor proposed three specific tax increases.

He is asking the legislature to increase the Business Privilege Tax, raise cigarette taxes and do away with the individual income tax deduction for FICA.

The FICA tax, or the Federal Insurance Contribution Act, is a 15.3 percent payroll tax split evenly between employees and employers. The revenues pay for Medicare and Social Security. Self-employed Alabamians pay the same 15.3 percent quarterly, meaning eliminating the deduction would hit many small business owners especially hard.

Alabama House Speaker Mike Hubbard last December summed up much of the opposition to eliminating the FICA deduction.

“I am opposed to removing the federal income tax deduction because it would basically require individuals to pay state taxes on their federal taxes, which is money they never even received,” he explained.

But eliminating the deduction is by far the largest part of Gov. Bentley’s latest proposal. Doing away with it would raise an estimated $182 million annually. Increasing the per-pack tax on cigarettes would raise $50 million, and increasing the business privilege tax would yield $28 million.

“Over the last few months, I have met with House and Senate members to discuss options and ideas that would prevent devastating cuts to state services,” Bentley said in a statement. “I look forward to working with lawmakers over the next few weeks to bring about real change in the way we fund state government moving forward.”

It is not possible to calculate the total potential tax increase in Bentley’s proposal because he included in his plan an open-ended call for “any other revenue measures that provide revenue for the General Fund.”


RELATED: The cigarette tax hike is a terrible idea, here’s why (opinion)


Conservative lawmakers have to this point beaten back all tax increase proposals, but State Rep. Ed Henry (R-Hartselle) said Wednesday the momentum seems to have shifted.

“I wish I could guarantee that taxes are off the table, that we had successfully beat back the tax push,” he said in an interview on Yellowhammer Radio. “There are a number of us that have laid our political lives on the line to stop taxes. We’ve done it for two sessions now. But I feel like the tide is starting to turn on us. They just keep coming back… I think they’re probably going to beat us this time… We’re going to fight with everything we have to stop it. But I feel like there are too many people in office right now who have succumbed to this idea that the government needs more of your hard-earned income.”

Henry said he expects Republican legislative leaders to push increases on the cigarette tax, the the business privilege tax and a Medicaid provider tax that would hit pharmacies and nursing homes.

“The tobacco tax probably annoys me (the most),” he said. “Today we’ll tax smokers. Next year we’ll tax alcohol drinkers…. This year we’re going after pharmacists and nursing homes. Next year it’ll be doctors. Then we’ll go after construction workers. But you never do a broad based tax because the people would vote you out of office… I’ve told my colleagues, if you really feel like we need more revenue, raise the sales tax one percent. That raises more than enough money and it effects every single person that lives here and does business here… If you really need money, do a sales tax. And guess what? We don’t really need money that bad.”

The legislature’s second special session of the year is set to begin Tuesday, Sept. 8. They will have 12 legislative days to pass a balanced budget before the current fiscal year ends Oct. 1.


3 hours ago

OK, it’s time to start talking about opening up Alabama’s economy

The irresponsibility of the media, national public health officials and China has effectively destroyed our economy, individual businesses and American lives.

It is time to look for the exit ramp.

On March 14, Ramsey Archibald, son of John Archibald, was responsible for a completely ridiculous piece of video that rightly scared the heck out of many Alabamians.

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Archibald helped push the message that 2.5 million Alabamians would get the coronavirus, adding, “Let’s be conservative and say 50% get COVID-19.”

But wait, there’s more.

The video also makes the following claims:

  • 500,000 will need to be treated at a hospital.
  • 125,000 will need treatment at an intensive care unit.
  • 25,000 people could die

The Alabama Media Group “data reporter” painted this projection of millions getting sick and 25,000 dead as the best-case scenario.

He — and his publication — got it wrong. Big time.

But it worked. In concert with other lunatics, they declared that Alabama Governor Kay Ivey wanted people to die, or was at least cool with it, if she didn’t declare Alabama to be a “shelter-in-place” state.

After all, they just heard of such a thing and the smart states were doing it, so the dummies in Alabama should do it as well.

I, for my part, saw this for what it was and pointed out that at some point the governor’s office would cave and make the order, so she should just do it.

That’s exactly what happened.

The numbers began to change.

March 14 — 25,000
March 31 — 1,700
April 1 — 7,300+
April 2 — 5,500+
April 5 — 923
April 8 — 634

Now, this other info came from the Institute for Health Metrics and Evaluation projections.

Archibald’s info? A CBS News piece and a calculator. The projection went from 25,000 to 634 in less than a month.

The national line moved from 2.2 million to 60,000+ in that same time frame.

But the storyline didn’t reflect that change.

“People will die!” after all.

It won’t change now either.

It’s time to acknowledge that Alabama should be figuring out how to get back open for business.

Here is my suggestion how:

  1. Social distancing continues until August 1
  2. All businesses, outside of bars, restaurants and sporting events, can open on May 1
  3. Bars, restaurants and sporting events can open on May 15 with half occupancy
  4. Everything can fully open up on June 1
  5. Dates can change based on data

Why these dates?

Why not? Archibald based his on less.

The other steps we took were based on incorrect information and a guess.

Nations in Europe are doing similar things, and I thought people wanted us to be like Europe.

Give Alabamians some hope. Let them know there is a light at the end of the tunnel. Be optimistic, but safe. Be smart, but understand that people are suffering here.

Jobs and businesses are already lost, unemployment is through the roof. It’s time to show the people of Alabama that there was a reason for that.

Dale Jackson is a contributing writer to Yellowhammer News and hosts a talk show from 7-11 am weekdays on WVNN.

4 hours ago

Yellowhammer connects your business to Alabama consumers

After nine years, our mission remains the same: reflect our state, its people and their values. As the state’s second-largest media outlet, Yellowhammer connects your business to the people of Alabama.

Online, on the radio, podcasts, events and more. What can Yellowhammer do for you?

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4 hours ago

Ainsworth encourages Alabamians to ‘Ring for the Resurrection’ on Easter

Lt. Governor Will Ainsworth is asking all Alabamians to join him in a “Ring for the Resurrection” campaign on Easter Sunday. The effort is intended to promote unity at this COVID-19 time of prolonged separation and to celebrate the resurrection of Jesus Christ following his crucifixion.

Ring for the Resurrection, which was created by Ainsworth, calls for all churches and individuals across the Yellowhammer State to ring a bell at noon on Sunday, April 12, in joint celebration of the holiday.

“Social distancing guidelines require us to remain apart from our extended families, church members, and other individuals on a sacred religious holiday that normally encourages us to gather together,” Ainsworth said in a statement on Wednesday. “But I realized that the simple act of ringing a bell can allow us to remain physically distant while being united in spirit.”

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“My wife, Kendall, our twin boys, Hunter and Hays, and our daughter, Addie, will be among those ringing a bell at noon on Sunday to celebrate the miracle of Easter,” he concluded. “While Gov. Ivey’s stay-at-home order, the public’s health and safety, and simple common sense prevent Christians from gathering in large groups even on the holiest of days, all of us can join together in spirit as we ring a bell to recognize that Christ has risen.”

This comes after Ainsworth earlier this week unveiled a new website designed to provide small business owners with a one-stop online information hub related to the ongoing pandemic.

RELATED: Ivey announces campaign encouraging Alabamians to pray for medical personnel, first responders

Sean Ross is the editor of Yellowhammer News. You can follow him on Twitter @sean_yhn

5 hours ago

COVID-19 restrictions unfairly choke small business

When Mark and Susan Anderson were required by a statewide mandate to close the doors of their Dothan clothing and outdoor gear store, Eagle Eye Outfitters, they felt like it was a necessary sacrifice for the good of public health. By limiting retail shopping to essential items such as groceries, prescriptions, and fuel, the governor’s order takes a great many people off the streets.

Hopefully, it slows the spread of the rampant COVID-19 virus. But the closure is incredibly painful for owners like them: it has forced them to furlough more than 150 employees, and the massive loss of revenue will leave a mark on their business for years.

What the Andersons don’t understand was how it is fair for one of their local competitors, the national chain Academy Sports and Outdoors, to continue selling the same types of apparel and outdoor gear.

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In this case, the loophole for Academy is their small firearms counter. Guns and ammunition are considered essential under the current order. Therefore, Academy and others who carry firearms have been allowed to continue to do business — even if guns and ammunition are only a small percentage of their overall sales.

One of the unintended consequences of the mandate is that small businesses, which often specialize in a more narrow range of merchandise, are penalized more heavily than their national chain competitors.

You heard that right: businesses owned and operated by Alabamians are absorbing the crushing cost of total closure, while national chains based out of state continue to snatch up what little retail demand still exists in the downturn.

If all businesses operating in Alabama were restricted from selling non-essential goods, small businesses might at least expect to benefit from the pent-up economic demand that will exist once the mandate is lifted. As it is, demand for those goods and services is funneled immediately to the big chains, cutting small business owners out of the deal entirely.

Bob Couch of Couch’s Jewelers feels that his small business is paying a higher price than others, as well. While he is forced to shutter his 75-year-old family jewelry store in downtown Anniston, Wal-Mart is allowed to continue selling jewelry just a short distance away. Because they carry groceries and have a pharmacy, they are allowed to sell anything.

None of the small business owners I spoke with this week felt the retail sales restrictions were unnecessary, given the scope and seriousness of the pandemic. But they think the state government has picked winners and losers with a poorly-conceived order.

They are right. And the governor can correct it today if she chooses.

Vermont heard a similar outcry from its small business community. In response, it amended its closure order so that businesses that remain open to offer essentials are limited to just those sales. In a large department store that offers a variety of goods, selling non-essentials is temporarily prohibited. No more going to Wal-Mart for groceries, but then wandering the aisles looking for a pair of gold earrings or a sleeping bag.

These are trying times for businesses of every size. But there’s no good reason for our own state government to damage Alabama’s small business owners further.

None of us likes the loss of civil liberties, or the freedom to do business as we choose — not even for a day. But if our current public health concerns are so extraordinary as to require such restrictions, the least government can do is ensure that they be equally and fairly applied. Every business operating in this state — big box or main street — should bear its share of the burden.

Dana Hall McCain, a widely published writer on faith, culture, and politics, is Resident Fellow of the Alabama Policy Institute; reach her on Twitter at @dhmccain.

API is an independent, nonpartisan, nonprofit research and educational organization dedicated to free markets, limited government, and strong families, learn more at alabamapolicy.org.

6 hours ago

Alabama community colleges donate medical supplies to those fighting COVID-19

Community colleges across Alabama, many of which house nursing programs, are donating their medical equipment to those on the front lines of the fight against the coronavirus.

According to a release from the Alabama Community College System (ACCS), many campuses across Alabama have equipment for their “simulated healthcare settings” where students train for medical careers.

“We are grateful for the daily sacrifice of Alabama’s healthcare providers and are grateful we can do our part to help serve our communities during the COVID-19 pandemic,” said Jimmy Baker, chancellor of the ACCS.

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The equipment donated includes much sought-after ventilators that can help treat the most serious coronavirus cases.

The community colleges also handed out their supply of Personal Protective Equipment like masks to cover the face to local hospitals.

“Much like our efforts to meet the needs of every student that crosses our paths, our colleges work every day to help meet the needs of the communities they serve,” added Baker.

“On behalf of the Alabama Department of Public Health, I am grateful for the willingness of the Alabama Community College System to grant the urgent request for the loan of their available ventilators in response to the COVID-19 pandemic,” commented State Health Officer Scott Harris.

“We are continually encouraged by the number of entities across the state that are rising to the occasion to meet the needs of the citizens of Alabama,” Harris concluded.

Henry Thornton is a staff writer for Yellowhammer News. You can contact him by email: henry@yellowhammernews.com or on Twitter @HenryThornton95.